Bloomberg News

GM U.S. Ignition Recall-Suit Combination Sought by Lawyer

April 02, 2014

GM Chief Executive Officer Mary Barra

GM Chief Executive Officer Mary Barra told a U.S. House committee yesterday that the automaker still doesn’t have all the answers that might explain why it waited a dozen years to fix the flaw. Photographer: Pete Marovich/Bloomberg

Lawyers suing General Motors Co. (GM:US) over the recall of 2.59 million small cars for faulty ignition switches say the best judge to handle the litigation is the one overseeing Toyota Motor Corp. (7203)’s acceleration cases, which resulted in a $1.63 billion settlement.

U.S. District Judge James Selna in Santa Ana, California, is uniquely experienced and positioned to manage the GM case, according a request to consolidate the lawsuits filed with the Judicial Panel on Multidistrict Litigation in Washington.

“The scope of the expanding recall and number of cars and consumers involved will result in a high volume of lawsuits filed in multiple jurisdictions warranting coordinated or consolidated proceeding,” Dana Taschner, an attorney for one of the plaintiffs, said in the March 31 filing.

Related:

  • GM’s Barra Faces Off With U.S. Lawmakers Over Recall
  • Barra Seeks to Distance GM From Old Cost-First Culture

The recall crisis is GM’s biggest since emerging from bankruptcy in 2009. On March 31, the automaker more than doubled its recall-related charges to $750 million after saying faulty power steering in 1.5 million other vehicles needs to be fixed. This year, GM has recalled almost 7 million vehicles worldwide, denting a reputation for quality that the automaker had only recently repaired after completing a government-sponsored reorganization.

The ignition-related recalls involve a defect that can cause the switch to shut off, which in turn can cause the engine to stall and the car’s airbags to be deactivated. At least 13 deaths have been linked to the defect.

15 Lawsuits

At least 15 lawsuits have been filed in federal courts by buyers of Chevrolet Cobalts, Saturn Ions and other recalled models who seek to represent other GM customers in class-action cases alleging they wouldn’t have bought the cars, or paid less for them, had they known about the defect.

Eight of those cases have been filed in Selna’s California district, most of them by plaintiffs’ law firms that have leading roles in the Toyota litigation. Other cases have been filed in cities including Corpus Christi, Texas; Flint, Michigan; Chicago and Miami.

Lawyers for GM drivers in Corpus Christi are asking the judge to order GM to issue a “Park It Now” alert, urging owners not to drive the recalled cars until they have been fixed. GM may potentially be forced to pay for rental cars or provide loaner vehicles for affected drivers, according to the March 24 request.

In Santa Ana, lawyers asked Selna to order GM to notify its customers in California that they are entitled to a free rental vehicle while they wait for their ignition switches to get fixed.

“Many drivers do not know about the free rental car option and are left to choose between continuing to drive the defective vehicles or paying for rental cars while they wait for GM dealerships to have enough parts on hand for repairs,” Girard Gibbs LLP said in a statement yesterday.

Barra, Congress

GM Chief Executive Officer Mary Barra told a U.S. House committee yesterday that the automaker still doesn’t have all the answers that might explain why it waited a dozen years to fix the flaw.

Greg Martin, a spokesman for Detroit-based General Motors, declined to comment on the request to consolidate the cases.

Hagens Berman Sobol Shapiro LLP, the Seattle-based law firm that filed a class-action complaint last month in Santa Ana, said before GM widened the recall to include 2.59 million cars that it’s seeking to recover about $250 for about 1.4 million owners in the U.S., or more than $350 million in total, plus punitive damages for the automaker’s alleged failure to disclose critical safety information.

Toyota owners in the U.S. claimed that recalls of more than 10 million vehicles worldwide related to sudden, unintended acceleration caused their cars to lose value. Selna is overseeing personal injury cases that Toyota is trying to settle out of court.

The case is In re General Motors LLC Ignition Switch Litigation, MDL 2543, U.S. Judicial Panel on Multidistrict Litigation (Washington).

To contact the reporter on this story: Edvard Pettersson in Federal court in Los Angeles at

epettersson@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Peter Blumberg, Fred Strasser


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